The market value of Polperro leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can increase substantially once the unexpired lease term is less than eighty years
Leasehold premises in Polperro with more than 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Chelsea Building Society | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service will provide you enhanced control over the value of your Polperro leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Trailing lengthy discussions with the landlord of her garden flat in Polperro, Melissa commenced the lease extension process as the 80 year deadline was swiftly coming. The transaction completed in October 2011. The freeholder’s costs were restricted to a tad over five hundred GBP.
In 2012 we were phoned by Mr Harvey Moore who, having owned a basement apartment in Polperro in March 2008. The question was if we could shed any light on how much (approximately) compensation to the landlord would be for a 90 year lease extension. Identical residencies in Polperro with an extended lease were in the region of £260,000. The average ground rent payable was £50 billed quarterly. The lease terminated on 14 September 2096. Given that there were 71 years remaining we estimated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 not including costs.
In 2014 we were approached by Mr Nathan Bailey who, having acquired a ground floor apartment in Polperro in June 2008. We are asked if we could approximate the premium would be to extend the lease by ninety years. Comparative flats in Polperro with a long lease were in the region of £254,200. The average amount of ground rent was £60 billed quarterly. The lease lapsed on 24 May 2076. Having 51 years outstanding we approximated the compensation to the freeholder to extend the lease to be between £43,700 and £50,600 exclusive of professional charges.